Understanding recent empirical evidence on race and labor market outcomes in the USA

Racial inequality remains a substantial problem in American society. Compet ing explanations of African American - white inequality often overlap but t hey are often also quite contentious. Recent empirical studies on the role of race and labor have tended to absolve the market process of contributing to persistent racial discrimination. The most sophisticated studies that c laim to show no discrimination within the labor market rely on a single tes t score variable (the AFQT) within one dataset. However, the AFQT over-esti mates African American - white pre-labor market skill differences, its pred ictions have not been replicated by studies that employ different measures of cognitive skills, and it yields inconsistent and counter-intuitive resul ts when decomposed into its component parts. After reviewing some of the mo st recent literature, this study concludes that the notion that competition will eliminate discrimination within the labor market is little more than conservative political ideology masquerading as science. So-called pre-labo r market inequality, which may also be summarized as the class and cultural background of individuals, does have an impact on individual well-being an d intergenerational mobility. However, we are unable to distinguish the man ner in which class background matters. Is it because superior class positio n creates an advantage in skill acquisition or because is it because superi or social status increases access to persons embedded into positions of pow er and authority? In addition, several studies present strong empirical evi dence of discrimination within the labor market.